Stacy v. Burke

• Decision Date: 22 October 1970
• Docket Number: No. 55,55
• Citation: 269 A.2d 837,259 Md. 390
• Parties: Erle M. STACY v. Thomas F. BURKE, Executor under the will of Erle Edwards Stacy.
• Court: Maryland Court of Appeals

Page 390

259 Md. 390

269 A.2d 837

Erle M. STACY v. Thomas F. BURKE, Executor under the will of Erle Edwards Stacy.

No. 55.

Court of Appeals of Maryland.

Oct. 22, 1970.

Robert A. Wallace, Silver Spring (George L. Quinn, Jr., Silver Spring, on the brief), for appellant.

James T. Barbour, Washington, D. C., for appellee.

Argued before HAMMOND, C. J., and BARNES, McWILLIAMS, FINAN, SINGLEY, SMITH and DIGGES, JJ.

BARNES, Judge.

The two principal question in this appeal are whether the Circuit Court for Montgomery County (Shook, J.) in a suit by a decedent's executor to declare a constructive trust on certain property of the decedent in the hands of the appellant erred (1) in declining to admit two documents signed by the decedent in regard to alleged gifts of the property and (2) in withdrawing its original order ruling for the defendant and entering a second order ruling for the plaintiff, executor, after the plaintiff (appellee) had already filed an appeal to this Court from the initial order.

The basic facts are substantially undisputed. Erle Edwards Stacy, the decedent (Uncle Erle) died on January 23, 1969, at the age of 88 in a nursing home in Wheaton, Maryland. He was a widower at the time of his death. He had no children. His only surviving heirs were a brother and the children of a deceased brother Arthur Stacy. The appellant, Erle M. Stacy (Nephew Erle), who was the defendant below, was one of the children of the deceased brother Arthur and was named for his Uncle Erle.

Uncle Erle was an educated person who had granduated from William and Mary College in 1901. He became a professor of mathematics at William and Mary College and at the University of Texas.

There was a close business relationship between Uncle Erle and his brother Arthur. Uncle Erle had founded a plumbing, heating and roofing contracting business in Washington, D. C. in 1907. He operated it himself until 1921 when his brother Arthur joined him as a partner. Together they operated the business until 1932 when Arthur brought out his brother's interest in the business. Uncle Erle, however, never lost interest in the business; and whenever Nephew Erle, who was employed in the business, visited his Uncle Erle, he always inquired about collections and other relevant business matters. After Nephew Erle acquired and operated the business, Uncle Erle's interest in it continued. The relationship between Uncle Erle and his Nephew Erle was a close one and Uncle Erle was interested in his nephew's grogress and welfare.

Uncle Erle's wife, Bertha, died on January 4, 1967, leaving him alone in their home in Arlington, Virginia. Nephew Erle obtained a housekeeper for his uncle; but after four months, Uncle Erle desired to move to Maryland and thereafter did move to Montgomery County to a nursing home where he could be close to Nephew Erle and his family as well as to his brother William. The Arlington house was closed and remained vacant for approximately one year.

Thomas F. Burke was a co-executor and a co-trustee with his Uncle Erle under Bertha's will. Shortly after Bertha's death on January 4, 1967, Thomas F. Burke, who had represented Uncle Erle from time to time, met Uncle Erle and Nephew Erle at the Riggs National Bank in Washington, D. C., where Uncle Erle and his wife had their bank accounts, and assisted in obtaining a power of attorney for Nephew Erle so that he could draw funds from Uncle Erle's account to pay bills. On February 22 1967, Uncle Erle executed a general power of attorney with broad powers. This general power of attorney was duly witnessed by a notary public who took Uncle Erle's acknowledgement of the power of attorney.

On April 5, 1967, when Uncle Erle moved to Montgomery County, he signed a letter offered in evidence by Nephew Erle, but not admitted into evidence by the trial court. The letter read as follows:

'April 5, 1967

'Dear Erle:

'Along the lines of our previous discussion, please place the proceeds from the sale of my home in Arlington in one or more joint savings accounts, using my name and yours.

'I intend that you have full ownership of these funds should I predecease you and that they shall not in any way be considered as a part of my estate.

'I truly appreciate all of the time and effort you are devoting to help get my affairs in order.

'Affectionately yours,

/s/ Uncle Erle

/s/ Erle E. Stacy'

After the Arlington house was sold but prior to the settlement and distribution of the proceeds of sale, Uncle Erle, on December 6, 1967, signed a document which read as follows:

'December 6, 1967

'TO WHOM IT MAY CONCERN:

'I have asked my nephew, Erle M. Stacy, to write these instructions for my signature so that he may act legally in conducting my business and financial affairs; while acting under the General Powers of Attorney I previously gave to him:

'1. In keeping with our prior understanding I have agreed that he should pay to himself forty dollars ($40.00) per month for his services to me.

'2. I want the money from the sale of my Arlington house in his name alone. It is my wish that he have these funds.

'3. I have instructed him to purchase shares in the B. F. Saul Co. Investment Trust. The shares to be purchased from the proceeds from principal payments of first trust notes that I own. These shares are to be made out in our joint names, with the right of survivorship.

'4. These instructions have been discussed with my nephew and have been carefully read by me. Accordingly I sign my name.

/s/ Erle Edwards Stacy'

This document was offered in evidence by Nephew Erle but was not admitted by the lower court into evidence.

It was stipulated that the signatures of Uncle Erle on the letter of April 5, 1967, and the document of December 6, 1967, were genuine-and written by Uncle Erle. The evidence indicates that Uncle Erle was mentally alert during all times relevant in the present case and there is no contention that he was mentally incompetent at such times.

Beginning December 7, 1967, Nephew Erle drew checks through September 10, 1968, on Uncle Erle's account in a total amount of $23,944.93 payable to B. F. Saul Company for the purchase of B. F. Saul Real Estate Investment Trust shares of stock registered in the joint names of Uncle Erle and Nephew Erle as joint tenants with the right of survivorship.

On March 15 and 20, 1968, Nephew Erle drew checks on Uncle Erle's account in a total amount of $25,480.00 which was deposited in the name of Nephew Erle alone or in the joint names of Nephew Erle and his wife Virginia. These funds were the proceeds from the sale of the Virginia house of Uncle Erle.

Two checks for $1,926.00 and for $2,000.00 were drawn by Nephew Erle to A. A. Stacy & Son, Inc. on June 14, 1967, and August 22, 1968, respectively, as loans to that corporation. The $1,926.00 loan has been repaid by the corporation; the $2,000.00 loan was unpaid at the time of the hearing and was due and owing to the executor of Uncle Erle's estate. If the corporation has not paid the $2,000.00 to the executor when the mandate in this case is returned to the lower court upon the remand, the executor may proceed to collect this debt due the estate, and the mandate is without prejudice to such collection.

At the hearing before the lower court on October 16, 1969, in addition to Nephew Erle, his wife Virginia and Mr. Burke, the appellee, Nephew Erle's brother William and his mother Essie Mae Stacy, testified.

William confirmed the close and affectionate relationship between his Uncle Erle and his uncle's namesake, Nephew Erle. He testified in regard to the kind of a person his Uncle Erle was, as follows:

'He was a person of very strong English type tradition on family ties who considered himself to be the patriarch of the family upon the demise of his father, my grandfather, and the leader of the family and one who was very concerned with all the workings of the family, the social, religious and business and financial workings.'

Nephew Erle's mother, Essie Mae, testified, without objection, that she sae Uncle Erle several times a week when he was in a nursing home. In the latter part of January 1968 she had a conversation with him as follows:

'I don't know the date that was, just the last of January and we went out into the living room and talked for quite a while. And, as usual, he was asking about Erle M., my son, and then he got around to the subject of his house in Arlington. He mentioned he would be so glad when it was sold; that he didn't want the house standing vacant. He said to me, I expect to give Erle the proceeds from the sale of the house in appreciation for what he's done for me. He also said that he, having been in the business himself for so long, realized that Erle had all he could do to managing his own business without the extra responsibility of taking care of his, Erle E's financial and personal affairs. In appreciation he was going to give Erle the proceeds from the sale of the house in Arlington.'

Essie Mae saw Uncle Erle several times after January 1968 and had a conversation with him on June 6, 1968. She testified that he told her the same things he had told her before. The conversation continued as follows:

'He said also I have instructed him to take the money that has accumulated from the paid-up first trust notes that I have with B. F. Saul, the principal, my shares in the real estate mortgage investiment fund of Saul Company, and I have also instructed him to use my name, Erle E. Stacy, and Erle M. Stacy's name as joint tenants with rights of survivorship and buy the certificates with it.'

'As I said, the first conversation was in January, when we were sitting out in the living room or lobby and, as usual, he asked about Erle M., my son, and the business.'

'Q. What did he say? A. He said, I know from experience Erle has all he can do to manage the plumbing and heating business and take care of himself. He said I feel very keenly how busy he is and I appreciate more than I...